In Italy, there is a scale of lawyers’ fees that is – under an old 1933 provision from Mussolini's time – set on the basis of criteria laid down by decision of the National Lawyers’ Council (Consiglio Nazionale Forense) and approved by the Minister of Justice after he has obtained the opinion of the Interministerial Committee on Prices (Comitato Interministeriale dei Prezzi) and the Council of State (Consiglio di Stato). Those criteria are to be determined on the basis of the monetary value of disputes, the level of the court seised and the duration of the proceedings. For each procedural step, or series of steps, the scale sets maximum and minimum fees. Any agreement derogating from the minimum fees set by the scale for lawyers’ services is void. It is only at the time of settlement of the fees that the court may, by reasoned decision, exceed the maximum limit (in cases of exceptional importance) or fix fees below the minimum limit
(where the case proves easy to deal with).

In the first case, Mr Cipolla, a lawyer drew up three summonses for his clients. The dispute was finally resolved by means of a settlement without Mr Cipolla’s involvement. Having already made an advance payment of LIT 1 850 000, the client refused to pay the sum of LIT 4 125 000 demanded by her lawyer. Since the Tribunale di Torino rejected Mr Cipolla’s action for the payment of that sum, he brought the matter before the Corte d’Appello di Torino seeking application of the scale of fees.
In the second case, Mr Macrino and other clients contested the order obtained against them by Mr Meloni concerning the fees he had demanded from them for an out-of- court consultation on copyright, claiming the fees were disproportionate having regard to the importance of the case dealt with and the services performed. The Tribunale di Roma asked the Court of Justice whether the scale, in so far as it is applicable and is binding for lawyers in out-of-court matters, is compatible with the EC Treaty.

The Court held that the antitrust rules in the Treaty did not apply because the minimum fee system in Italy was not the result of an agreement between undertakings. The Court held that it is the Italian State and not the Bar Association which
exercises the power to take decisions on lawyers’ minimum fees. Consequently, the Italian State did not require or encourage the adoption of agreements, decisions or concerted practices contrary to the rules of free competition or of reinforcing their effects, or requiring or encouraging abuses of a dominant position or reinforcing the effects of such
abuses.

As for the provisions of the Treaty of the freedom to provide services, the Court held that the minimum fee arrangement was caught by Article 49 EC because it renders access to the Italian legal services market more difficult for lawyers established outside Italy, depriving them of the possibility, by requesting fees lower than those set by the scale, of competing more effectively with lawyers established on a stable basis in Italy and restricting the choice of recipients of such services.

Nevertheless, the Court held that the system could be justified. It held that objectives of protection of consumers (recipients of legal services) and the proper administration of justice are overriding requirements of public interest capable of justifying a restriction on freedom to provide services. But that is subject to the twofold condition that the national measure is suitable for securing the attainment of the objective pursued and that it does not go beyond what is necessary in order to attain that objective. The Court of Justice leaves it to the referring Italian courts to check whether those conditions are fulfilled in the present cases.

The Court, when examining the justification of the system, even makes the startling finding that price competition may be harmful to consumers! (see paragraph 67 of the judgment)

What is certain is that the Commission's Report on Competition in Professional Services (COM(2004)83 final) is now unsound as a proper statement of the law relating to professional services.